Cyprus: Maritime Liens And Ranking Of Priorities According To Cypriot Law

Last Updated: 6 May 1999

Most Read Contributor in Cyprus, December 2017

Cyprus has the fifth largest fleet in the world with a total of 2,873 vessels of approximately 29,080,117 tons. Cypriot vessels are frequently involved in lengthy court proceedings throughout the world and it is often the case (especially in civil-law jurisdictions) that reference is made to the applicable laws of the country of the flag of the vessel.

This article purports to address the issue of the priority of maritime claims under Cyprus Law. It should be noted from the outset that a considerable number of cases has been decided by Cypriot courts on this legal issue, providing for some clear and detailed rules. However, it remains always at the discretion of the court to vary and/or reverse the order of priorities depending on the special circumstances of each particular case, as well as on considerations of equity and natural justice.


In Kamal Hassanein vs "Hellenic Island" and/or "Island" and others, (1994)1 J.S.C. 578, it was held by the Supreme Court of Cyprus that, by virtue of section 29(2)(a) of the Court of Justice Act of 1960, the sources of Cyprus Admiralty Laws spring from the English Admiralty Laws as those were applied in England prior to Cyprus becoming an independent country, 1 October 1960. Therefore, it should be clarified from the outset that there exist many similarities between English and Cyprus Laws on the issue of maritime liens.

The concept of maritime liens arises under Cyprus Law by virtue of section 3(3) of the English Administration of Justice Act 1956. Although the 1956 Act does not clearly define what is a maritime lien, it has been widely defined as a privileged claim over a vessel or other maritime property in respect of services rendered to, or injury caused by that vessel or maritime property. Where there is a maritime claim on any vessel or other maritime property, the Admiralty jurisdiction of the Cypriot Courts may be invoked by an action in rem against the vessel or maritime property. A maritime lien may be so invoked against the vessel or other maritime property even in the hands of a bona fide purchaser who knew nothing of the claim.

The main categories of claims in respect of which Cyprus Law recognises and upholds maritime liens are as follows: a) bottomry; b) salvage; c) wages; d) Master's wages; e) disbursements and liabilities; and f) damage done by a ship. It should be noted that under Cyprus Law maritime liens enjoy certain advantages over all other permitted actions in rem ("statutory liens", under Cyprus Law a mortgage is special type of statutory lien):

  • As to the time of creation of the lien;
  • In priority; and
  • In enforceability of security.

Under Cyprus Law a maritime lien has a procedural nature and depends on the remedies available in the country where relief is sought (lex fori). Kamal Hassanein vs "Hellenic Island" or "Island" and others (1994) 1 J.S.C. 584. Cypriot Courts in determining the existence of a maritime lien will apply Cyprus Law, even in cases where under a different law (e.g. the lex loci contractus) a maritime lien does exist whereas none exist under the lex fori (Cyprus Law). It is worth noting that in an obiter dictum in the Kamal Hassanein Case Judge Artemis held that "... it would

be more equitable and reasonable to accept the approach of the Ioannis Daskalelis, [1974] Lloyd's LR 174. Therefore, in my opinion, the existence of a maritime lien should be considered as having a substantive nature and be decided according to the lex loci contractus. If according to the lex loci contractus a maritime lien arises such a maritime lien should be recognised by Cyprus Law; however, the rank of priorities of this maritime lien should be decided according to the lex fori (Cyprus Law)". However, Judge Artemis went on to concur with the majority judgement of the Supreme Court of Cyprus and no further emphasis was given on this point.

According to ABC Shipbrokers Ltd vs Preskott Shipping Co. Ltd, (1992)1 J.S.C. 1034, a person who has paid off the privileged claimant (e.g. a ship manager paying crew and master wages) does not stand in the shoes of the privileged claimant in respect of his maritime lien. This person can be considered only as a volunteer who has decided to pay off a debt which constituted a maritime lien on the vessel; however, by his action, he did not acquire any maritime lien and therefore had no right in rem based upon a maritime lien. In the above case, Judge Poyiadjis further held that "...a person who at the request of the owner of a vessel pays off the crew will stand as a necessaries man and thereby posses a statutory right of action in rem against the ship in respect of his advances. But necessaries men have no prior equity because a lien for necessaries is a statutory lien and it is not attached until the institution of an action in rem". Thus, in principle, a statutory lien does not crystalise into a maritime lien prior to an action in rem being filed with the Cypriot Courts.

In Commercial Bank of the Near East Ltd vs The Ship "Pegasus III", (1978)1 C.L.R. 597, the Supreme Court of Cyprus upheld the general principle of English Law by deciding that although Master's disbursements give rise to a maritime lien, necessaries only create a statutory lien which is enforceable against the vessel only after the institution of an action in rem.

It should be noted that although section 3(3) of the Administration of Justice Act 1956 enables a claimant to arrest a vessel to which a maritime lien attaches, no provisions are contained therein in respect of the arrest of a "sister vessel". However, this situation is compensated by section 3(4) of the 1956 Act which provides that the admiralty jurisdiction of the High Court may be invoked (whether the claim gives rise to a maritime lien over the vessel or not) by an action in rem against "..... (b) any other ship which, at the time when the action is brought, is beneficially owned as aforesaid". However, it should be distinguished that in such cases a person who possesses a maritime lien in respect of that "other ship" has no higher right or priority than that enjoyed, under the circumstances by a statutory lienee.


Cyprus admiralty courts are vested with jurisdiction under section 19 of the Courts of Justice Law, 1960, Law No. 14/60, to determine questions of priorities, as the Administration of Justice Act of 1956, section (3)(7) gave the High Court in England, sitting in Admiralty, jurisdiction to determine questions of title to the proceeds of sale of a vessel by an order of the Court. This jurisdiction is vested in the Court and may be exercised in the first instance by any Judge or Judges. The payment after the sale of the vessel is made out by an order of the Court or Judge, Section 11(2) of the Administration of Justice (Miscellaneous Provisions) Law, 1964 (Law No. 33/64).

With reference to English Law principles, The Bold Buccleugh (1851)7 Moo. P.C. 267, Cypriot Courts have defined the essence of a maritime lien as a right which "travels" with the vessel into whose possession it might subsequently pass, Supra note 6. Since, in principle, it is the vessel which is liable "to pay for the wrong it has done" there apply in Cyprus special admiralty procedures governing the issue of a judicial sale of a vessel. What is of particular interest for the purposes of the present article is the priority ranking of maritime liens and other claims as against the proceeds of such a judicial sale.

Prior to examining the rules governing the priority of maritime claims it is important to make the following three observations: (1) Under Cyprus Law the buyer of vessel through a judicial sale acquires a clean title in the vessel; (2) the proceeds of a judicial sale of a vessel are not shared equally between all privileged claimants but thorough and detailed rules have been developed for the ranking of each creditor; and (3) Cypriot Courts always have inherent discretion to vary the ranking of priorities on the basis of principles of equity and natural justice.

Maritime claims are ranked in following order under the Cyprus Law:

Marshall Expenses

Marshall expenses rank first in the list of priorities. The Marshall obtains such a high priority because without the services provided by him (supplies, guarding etc.) It would not be possible for the vessel to remain under the Admiralty Courts' jurisdiction during the period of the hearing of the trial.

Salvor's Lien

The salvor maintains such a high position in the ranking of priorities because without his emergency services there would not be any funds preserved for distribution between the claimants.

Damage Done By A Vessel

After salvors come the "damage done by a vessel" liens. These liens relate to claimants who have suffered physical damage by the vessel in question; for example a ship-to-ship collision or a vessel colliding with a fixed object.

Master's And Crew's Wages

Next in the ranking ladder come the claims of the Master and crew in respect of unpaid wages. These are contractual liens and are founded on the vessel's breach of the contract of employment with the Master and crew. It goes without saying that repatriation fees can be included, where appropriate, in a claim for Master's and crew's wages.


Again this is a contractual lien whose importance has greatly diminished due to modern highly sophisticated methods of extending credit.

Determination Of Priority Between Maritime Liens And Mortgages

Under Cyprus Law a mortgage is a special type of statutory lien and as such ranks below maritime liens. In Commercial Bank of the Near East Ltd vs The Ship "Pegassos III", Supra note 7, the Supreme Court of Cyprus, in examining the question of the priority of a foreign mortgage, A mortgage registered in Panama, held that although the validity and interpretation of such a foreign mortgage should be determined according to the law of the country in which the mortgage is registered, questions of priority are treated as procedural and should be determined according to the lex fori (Cyprus Law). The Court went on to reconfirm the general principle that maritime liens rank in priority over mortgages (whether registered or not).

Determination Of Priority Between Mortgages And "Necessaries"

This particular area of Cyprus Law has given rise to a considerable number of court decisions; it is noteworthy, however, that all court decisions incline to give a unified set of rules, in the sense that "necessaries" rank below mortgages.

In the Kamal Hassanein Case, Supra note 1, the Appellant supplied bunkering fuel to the vessel at the port of Alexandria in Egypt and was claiming that his claim had priority over that of the mortgagees (who were the interveners in the present case). Under Egyptian Law (the Law of the country governing the contract for the supply of bunkering fuel) the claim of the Appellants constituted a maritime lien and thus ranked higher than that of the mortgagees. However, the Cypriot Courts held that the lex fori (Cyprus Law) should apply to the facts of this case and therefore, the Appellant's claim did not give rise to a maritime lien and thus ranked below the claim of the mortgagees.

In Pilefs Limited and others vs The Commercial Bank of the Near East Ltd, (1983)1 C.L.R. 376, the Supreme Court of Cyprus held that necessaries men have no prior equity over mortgagees because a lien for necessaries is a statutory lien and it is not attached until the institution of an action in rem. In fact in this case the necessaries were supplied to the vessel five months prior to the registration of the mortgage. However, this statutory lien did not attach to the vessel until an action was brought, which was long after the mortgage was entered into. Indeed, it is implied from this case that should an action in rem for necessaries be instituted prior to the registration of the mortgage, such a claim would rank higher than that of the mortgagees.

Cargo Claims

In Nordic Bank PLC vs The ship "Seagull", (1989)1 C.L.R. 420, it was held that "...cargo claims carry no maritime lien and rank in priority after all mortgage claims".

A Shiprepairers' Lien - Possessory Liens

A shiprepairer has, under Cyprus Law, a possessory lien over the vessel and a general right to proceed in rem against the vessel. A possessory lien has priority over a mortgage, even in relation to a mortgage executed before the assumption of possession by the shiprepairer. In the instance of a mortgage the possessory lienee does not take the res cum onere. Where, however, possession is given up the security of the possessory lienee is lost and the mortgage prevails, Supra at note 14. It should be borne in mind that the essential element of a possessory lien is actual possession of the vessel until all the possessors demands have been met, or until the vessel is surrendered to the Marshall under an order of the Court. Thus a shiprepairer who forgoes his possessory lien, By losing physical possession of the vessel, can only proceed against the vessel with an action in rem, which of course shall leave him in a much worse off position in the order of priorities.

Of particular importance in the area of possessory liens is the case of Costas Stylianou vs The fishing trawler "Narkissos", (1963)1 C.L.R. 291.In this case a vessel was sold by public auction and the court was ask to determine the ranking of priorities of four creditors in respect of the proceeds of the sale of the vessel. The four creditors were the following:

a) a judgement-creditor for unspecified necessaries (the first suitor);

b) an execution-creditor for necessaries and repairs who kept at the time possession of the vessel through the Marshall (the second suitor);

c) a judgement-creditor entitled to a maritime lien originating in seamen's wages (the third suitor); and

d) a judgement-creditor in respect of a registered maritime mortgage (the fourth suitor).

The court held that the claim of the second suitor should rank first on the distributable amount for the following, inter alia, reasons:

a) the second suitor had a possessory lien over the vessel which he had, at all material times, maintained through the Marshall;

b) all creditors benefited by the supply of repairs and necessaries to the vessel by the second suitor, which contributed to her safety and maintenance prior to seizure; and

c) the amount of the second suitor's claim did not appear to be entirely out of proportion with the value of such repairs and necessaries.

The court went on to decide that after the claim of the second suitor, the claim of the third suitor should have priority. Unpaid seamen's wages was a maritime lien which constituted a privileged claim enforceable in the admiralty courts of Cyprus, in priority over the claims of a mortgagee and/or unsecured creditors.

Finally, between the claims of the first and fourth suitor, the court held that of the latter should stand in priority to the claim of the former. The first suitor was an unsecured creditor, who extended credit to the vessel, knowing of the mortgage charges, Such knowledge was proved by the evidence produced before the Court.


In principle, Cypriot Courts shall apply the general rules regarding the ranking of priorities, as those were outlined in the preceding paragraphs of this article. However, it should always be borne in mind that those are not clear cut rules, and courts are always vested with an inherent discretion to vary these rules accordingly.

In Tramp Oil and Marine Ltd vs the Ship "Pigassios", (1989)1 C.L.R. 46, it was held that if there are special circumstances on grounds of equity and natural justice, the order of priorities may be reversed by the Court. Reliance for this proposition was based on the relevant statement of the law as appearing in Halsbury's Laws of England, 4th Ed. Vol. 43, paragraph 1142, which in so far as relevant reads: "It would seem that the determination of the priority of liens over one another rests on no rigid application of any rules but on the principles that equity shall be done to the parties in the circumstances of each particular case. However, there is, a general order of priority, and there are certain general rules which, in the absence of special circumstances, the court tends to apply". It is important to note that in none of the reported admiralty cases Cypriot Courts applied the above principle in varying the order of priorities on the basis of equitable considerations.

In Commercial Bank of the Near East Ltd vs The Ship "Pegasius III", Supra note 7, on an application by the Marshall for approval of the judicial sale of a vessel at less than the appraised value the court held that the grounds upon which a court will order that the vessel be sold for a lesser sum are that " offers have been received within the time limited for the sale to take place by the Marshall's terms of sale or that only an offer or offers to buy at less that the appraised value have been received within that time or where, for example, there has been a sudden drop in values since the appraisement so that no offers to buy or no offers at or above the appraised value are likely to be forthcoming".

In Nicos Zacharias and others vs The Ship "Reiher", (1994)1 J.S.C. 567, the lawyers of the Plaintiff applied to the Court for the issuance of a writ of attachment in respect of their legal fees which had previously been approved by the Court in another action. The Court held that legal fees already approved by the Court were identical to a court judgement and thus could be executed by a writ of attachment over the proceeds of the sale of the vessel kept with the Court.




  • General Editor - Peter Morgan, M.B.E.
  • Deputy Editor - Jane Martineau
  • Assistant Editors - Graham Holliday and Andrew Bicknell of Clyde & Co., 51 Eastcheap, London EC3M 1JP


LLP Limited
69-77 Paul Street
London EC2A 4LQ
Tel: 01206-772-866
Fax: 01206-772 771

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances from a local lawyer or accountant.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions